The Irish innovator who's making mobile transactions really pay off
There are a few residual tech missions that seem to attract doomed investments every year. The 'smart home'. Voice-to-text technology. 3D televisions. But none has exercised investors and technologists more in recent years than 'mobile payments'. Every year, someone spends millions on a new system. Every year, it fails to take off.
There's O2 Money. There's Google Wallet. There's 'Near Field Communications'.
The problem, as giants such as McDonalds and Visa have discovered, is that many of us either don't trust mobile payments or haven't yet found them to be more convenient than plain old cash or credit cards.
That's where Peter Keenan comes in. His €35m start-up, Zapp, claims to have nailed down the mobile payments process once and for all. But instead of relying on 4G NFC flux capacitatory, he has reverted to route one: the banks.
Starting later this year, Zapp will automatically work for one-third of British bank account holders and 60pc of UK merchants.
That's because Zapp, with a large element of control from British banks, works using bank account apps. In other words, once you log in to your banking app, you can pay for things directly in the shop using your phone.
"There has been a lot of false dawns around the issue of mobile payments," said Mr Keenan, a Dublin-educated retail and banking industry veteran.
"This has been down to the failure of several things, but also because the market wasn't mature enough. Now it's different. 70pc of UK consumers have a smartphone – it's come from nowhere. We're now at a point in time where the ability to execute mobile payments is now mainstream. And I think that's what lots of customers and retailers now want to do."
Some industry figures back Mr Keenan's assertions up. Retailer Argos recently announced that 20pc of all its sales are now from mobile devices.
Overall online sales from mobile devices are growing strongly too, now standing at 27pc in Britain, according to Cap Gemini.
And then there is Ryanair: when Michael O'Leary proclaims a technology to be lucrative, it's a fair bet that the curve of the future is no longer a curve.
Last week, O'Leary revealed Ryanair's big plans for how to get money from customers.
"In five years' time, everyone on Ryanair will be paying on their mobile," he told the 'Sunday Independent's Nick Webb.
"You'll pay for your drinks and snacks with your mobile. You'll upgrade to priority boarding on your mobile."
"One thing about Ryanair and Michael O'Leary is that they have major foresight and he's a major disruptor," said Mr Keenan. "What he's getting at is that more and more customers are shopping for things using tablets and phones. He's just one of a number of retailers who are noticing all of this online growth from m-commerce."
Mr Keenan and Mr O'Leary have other things in common other than a wish for more mobile payments. Both are successful Irish businessmen who have made it big in companies with large UK customer bases.
Having grown up in Dublin, Drogheda and the North, Mr Keenan completed a degree in Trinity College before emigrating to Britain at a time of economic recession in Ireland.
"In 1990, there were no jobs here," he said. "Like a lot of my generation, I had to go find a job somewhere else. I found one in the UK working for Arthur Andersen as an accountant."
Things progressed quickly for Mr Keenan as he gravitated toward the retail industry.
"I came back to set up Dixons in Ireland in the mid-nineties," he said. "It was a time when the M50 was being built and the beginnings of the Celtic Tiger could be seen.
"Shopping centres were shooting up all over the place, such as Blanchardstown and the Jervis Centre. I opened [Dixons] stores in both those shopping centres and ran them for a few years."
With Mr Keenan's star in the ascendancy, he was called back to the UK and promoted to marketing director of PC World before being appointed managing director of Currys, part of the international DSG retail group.
Then the banks came calling. In 2009, Mr Keenan joined British financial giant HSBC as head of its branch network, overseeing 1,350 branches and 14,000 staff.
That stint, together with a lateral move into the position of HSBC's 'head of customer propositions', brought him to the attention of Vocalink, an organisation put together by Britain's biggest banks as an operator of the UK's national payments infrastructure.
The result is Mr Keenan now heads up Zapp, an industry-backed start-up with over €36m in funding to help develop mobile payments. So far, things are looking good for Zapp and for Mr Keenan. Five of the biggest UK banks have signed up to use the service. Mr Keenan said that he has also met Irish banks and the Central Bank in relation to a possible launch here.
"Approximately 40pc of UK banking customers have downloaded a banking app," he said.
"So the basic tools are there. For merchants, instant compatibility depends whether they use an acquirer's service or whether they're a bigger merchant using their own system.
"Some might have a bit of work to do to accept the service, but not much."
But what about things like fraud? Lots of phones are stolen every day. Does this mean that someone's payment means would be at risk?
"No, not really," said Mr Keenan. "In fact, it's safer than a credit card.
"First of all, most phones are pin- protected. But even for those that aren't, you need to log in to your banking app – with all that that entails – to use Zapp.
"If a thief somehow managed to do that, although I don't see how, then we will also have fraud monitoring systems in place, just as there are for traditional payment channels."
That all sounds fine. But many banking apps are clumsy and awkward to use. They take a while to open and sometimes are at the whim of a mobile network signal. Isn't that a potential barrier?
"That's a good point and user experience is absolutely crucial," said Mr Keenan. "Some banks do apps very well. Danske Bank is a good example, it's very user-friendly. Some of the others may have some catching up to do. But this will be an incentive for them to do so."
Mr Keenan says he misses Ireland. However, "as a good Catholic", he says he returns with his family regularly. It may not be too long before his next flight is bought using his smartphone.